Under what circumstances can an Engel & Volkers franchisee refuse to use service companies that Engel & Volkers has cooperation agreements with?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
We may enter into agreements with service companies, e.g., those that provide financial services, like banks or insurance companies, which you must use, except in cases where you have legitimate commercial or financial reasons for refusing such cooperation. These cooperation agreements will enable you to offer additional products and/or services to your clients, for example, mortgage loans and homeowner's insurance.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 43–54)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, Engel & Volkers may establish agreements with service companies, such as banks or insurance companies, that franchisees are generally required to use. These agreements are intended to allow franchisees to offer additional products and services, like mortgage loans and homeowner's insurance, to their clients.
However, an Engel & Volkers franchisee can refuse to use these service companies if they have legitimate commercial or financial reasons for doing so. This provides a degree of flexibility for franchisees who may find that these mandated services do not align with their business needs or financial interests in specific situations.
This clause protects the franchisee from being forced into arrangements that could be detrimental to their business. It is important for a prospective franchisee to understand what constitutes a 'legitimate commercial or financial reason' and to document such reasons carefully should they choose to opt out of using a preferred service company.